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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended February 28, 2011
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 1-5807
 
 ENNIS, INC.
  Texas
    
    75-0256410(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)2441 Presidential Pkwy., Midlothian, Texas
    
    76065(Address of Principal Executive Offices)
    
    (Zip code)
 (Registrants Telephone Number, Including Area Code) (972) 775-9801
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $2.50 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
  o þ
 þ o
 o o
 o
  Large accelerated filer oAccelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



ENNIS, INC. AND SUBSIDIARIES
 FORM 10-K
 FOR THE PERIOD ENDED FEBRUARY 28, 2011
 TABLE OF CONTENTS
 PART I:Item 1 Business
    
    
    3Item 1A Risk Factors
    
    
    6Item 1B Unresolved Staff Comments
    
    
    11Item 2 Properties
    
    
    11Item 3 Legal Proceedings
    
    
    13Item 4 [Removed and Reserved]
    
    
    13PART II:Item 5 Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    13Item 6 Selected Financial Data
    
    
    15Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 8 Consolidated Financial Statements and Supplementary Data
    
    
    26Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    26Item 9A Controls and Procedures
    
    
    26Item 9B Other Information
    
    
    27PART III:Item 10 Directors, Executive Officers and Corporate Governance
    
    
    27Item 11 Executive Compensation
    
    
    28Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    28Item 13 Certain Relationships and Related Transactions, and Director Independence
    
    
    28Item 14 Principal Accountant Fees and Services
    
    
    28PART IV:Item 15 Exhibits and Financial Statement Schedules
    
    
    29Signatures
    
    
    30EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2
  2




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PART I
 
 ITEM 1. BUSINESS
 Overview
  Business Segment Overview
  Print Segment
  ® ® ® SM SM ® ® SM SM ® ® ® ® SM SM ® ® ® ®
   3




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Apparel Segment
 ®
       4




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Patents, Licenses, Franchises and Concessions
  Intellectual Property
 ® SM ® ® ® ® ® ® ® SM ® ® ® ® ® ® SM ® ® ® ® ® SM SM SM
 Customers
  Backlog
  Research and Development
  Environment
  5




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##### Table of Contents



Employees
  Available Information
 www.ennis.com www.sec.gov
 
 ITEM 1A. RISK FACTORS
  Our results and financial condition are affected by global and local market conditions, and
competitors pricing strategies, which can adversely affect our sales, margins, and net income.
  
    
    Our ability to manage upward pressure on commodity prices and the impact of
government actions to manage national economic conditions such as consumer spending,
inflation rates and unemployment levels, particularly given the current volatility in
the global financial markets;
    
    The impact on our margins of labor costs given our labor-intensive business model,
the trend toward higher wages in both mature and developing markets and the potential
impact of union organizing efforts on day-to-day operations of our manufacturing
facilities.
 Declining economic conditions could negatively impact our business.
  6




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The terms and conditions of our credit facility impose certain restrictions on our operations. We
may not be able to raise additional capital, if needed, for proposed expansion projects.
  Declining financial market conditions could adversely impact the funding status of our pension
plan.
  We may be required to write down goodwill and other intangible assets which could cause our
financial condition and results of operations to be negatively affected in the future.
  Digital technologies will continue to erode the demand for our printed business documents.
    Our distributors face increased competition from various sources, such as office supply
superstores. Increased competition may require us to reduce prices or to offer other incentives in
order to enable our distributors to attract new customers and retain existing customers.
  7




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Technological improvements may reduce our competitive advantage over some of our competitors, which
could reduce our profits.
  We could experience labor disputes that could disrupt our business in the future.
  We obtain our raw materials from a limited number of suppliers, and any disruption in our
relationships with these suppliers, or any substantial increase in the price of raw materials or
material shortages could have a material adverse effect on us.
    We face intense competition to gain market share, which may lead some competitors to sell
substantial amounts of goods at prices against which we cannot profitably compete.
  8




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The apparel industry is heavily influenced by general economic cycles.
  Our apparel foreign operations could be subject to unexpected changes in regulatory requirements,
tariffs and other market barriers, political and economic instability, and social unrest in the
countries where it operates, which could negatively impact our operating results.
   Our apparel products are subject to foreign competition, which in the past have been faced with
significant U.S. government import restrictions.
     9




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Environmental regulations may impact our future operating results.
  Our new apparel manufacturing facility in Mexico is subject to certain risks regarding sales
growth and cost savings, as well as transition risks associated with moving the current production.
  We are exposed to the risk of non-payment by our customers on a significant amount of our sales.
  Our business incurs significant freight and transportation costs.
  The price of energy is prone to significant fluctuations and volatility.
  10




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We rely on independent contract production for a portion of our apparel production.
  We depend upon the talents and contributions of a limited number of individuals, many of whom would
be difficult to replace.
  Increases in the cost of employee benefits could impact the Companys financial results and cash
flow.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  ®
    11




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Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedPrint SegmentEnnis, Texas
    
    Three Manufacturing Facilities
    
    
    325,118
    
    
    
    Chatham, Virginia
    
    Two Manufacturing Facilities
    
    
    127,956
    
    
    
    Paso Robles, California
    
    Manufacturing
    
    
    94,120
    
    
    
    DeWitt, Iowa
    
    Two Manufacturing Facilities
    
    
    95,000
    
    
    
    Knoxville, Tennessee
    
    Manufacturing
    
    
    48,057
    
    
    
    Ft. Scott, Kansas
    
    Manufacturing
    
    
    86,660
    
    
    
    Portland, Oregon
    
    Manufacturing
    
    
    
    
    
    
    139,330Wolfe City, Texas
    
    Two Manufacturing Facilities
    
    
    119,259
    
    
    
    Moultrie, Georgia
    
    Manufacturing
    
    
    25,000
    
    
    
    Coshocton, Ohio
    
    Manufacturing
    
    
    24,750
    
    
    
    Macomb, Michigan
    
    Manufacturing
    
    
    56,350
    
    
    
    Anaheim, California
    
    Three Manufacturing Facilities (1)
    
    
    
    
    
    
    63,750Bellville, Texas
    
    Leasing
    
    
    70,196
    
    
    
    Denver, Colorado
    
    Four Manufacturing Facilities
    
    
    60,000
    
    
    
    101,600Oklahoma City, Oklahoma
    
    Sales Office
    
    
    
    
    
    
    460San Antonio, Texas
    
    Manufacturing
    
    
    47,426
    
    
    
    Brooklyn Park, Minnesota
    
    Manufacturing
    
    
    94,800
    
    
    
    Roseville, Minnesota
    
    Manufacturing
    
    
    
    
    
    
    42,500Arden Hills, Minnesota
    
    Warehouse
    
    
    
    
    
    
    31,684Nevada, Iowa
    
    Manufacturing
    
    
    232,000
    
    
    
    Bridgewater, Virginia
    
    Manufacturing
    
    
    
    
    
    
    27,000Columbus, Kansas
    
    Manufacturing
    
    
    201,000
    
    
    
    Leipsic, Ohio
    
    Manufacturing
    
    
    83,216
    
    
    
    El Dorado Springs, Missouri
    
    Manufacturing
    
    
    70,894
    
    
    
    Princeton, Illinois
    
    Two Manufacturing Facilities
    
    
    
    
    
    
    74,340Arlington, Texas
    
    Manufacturing
    
    
    69,935Mechanicsburg, Pennsylvania
    
    Warehouse
    
    
    
    
    
    
    7,500Rancho Cordova, California
    
    Administrative Offices
    
    
    
    
    
    
    108Tullahoma, Tennessee
    
    Manufacturing
    
    
    24,950Caledonia, New York
    
    Manufacturing
    
    
    138,730
    
    
    
    Sun City, California
    
    Manufacturing
    
    
    52,617
    
    
    
    Phoenix, Arizona
    
    Manufacturing and Warehouse
    
    
    
    
    
    
    59,000Neenah, Wisconsin
    
    Manufacturing
    
    
    
    
    
    
    57,786West Chester, Pennsylvania
    
    Sales Office
    
    
    
    
    
    
    1,1502,148,034
    
    
    
    606,208Apparel SegmentAnaheim, California
    
    Office and Distribution Center
    
    
    
    
    
    
    200,000Anaheim, California
    
    Manufacturing (1)
    
    
    
    
    
    
    304,536Chicago, Illinois
    
    Distribution Center
    
    
    
    
    
    
    120,000Atlanta, Georgia
    
    Distribution Center
    
    
    
    
    
    
    31,958Carrollton, Texas
    
    Distribution Center
    
    
    
    
    
    
    26,136Bensalem, Pennsylvania
    
    Distribution Center
    
    
    
    
    
    
    60,848Mississauga, Canada
    
    Distribution Center
    
    
    
    
    
    
    53,982Los Angeles, California
    
    Distribution Center
    
    
    
    
    
    
    31,600Agua Prieta, Mexico
    
    Manufacturing
    
    
    700,000
    
    
    
    Ensenada, Mexico
    
    Two Manufacturing Facilities
    
    
    112,622
    
    
    
    53,820Ensenada, Mexico
    
    Car Parking
    
    
    
    
    
    
    22,000Ensenada, Mexico
    
    Warehouse
    
    
    
    
    
    
    2,583
 12




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##### Table of Contents



Approximate Square FootageLocation
    
    General Use
    
    Owned
    
    LeasedHermosillo, Mexico
    
    Three Manufacturing Facilities
    
    
    
    
    
    
    126,263Hermosillo, Mexico
    
    Yard Space
    
    
    
    
    
    
    19,685Hermosillo, Mexico
    
    Vacant
    
    
    
    
    
    
    8,432Hermosillo, Mexico
    
    Storage for Machines
    
    
    
    
    
    
    1,640812,622
    
    
    
    1,063,483Corporate OfficesEnnis, Texas
    
    Administrative Offices
    
    
    9,300
    
    
    
    Midlothian, Texas
    
    Executive and Administrative Offices
    
    
    28,000
    
    
    
    37,300
    
    
    
    Totals
    
    
    2,997,956
    
    
    
    1,669,691
 
 (1)
    
    Lease expires June 2011 and the Print manufacturing facilities will be moving to the
Anaheim distribution center. 
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. [REMOVED AND RESERVED]
 
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
  Common Stock
    
    DividendsTrading Volume
    
    per share ofCommon Stock Price Range
    
    (number of shares
    
    CommonHigh
    
    Low
    
    in thousands)
    
    StockFiscal Year Ended February 28, 2011First Quarter
    
    $
    19.35
    
    
    $
    15.52
    
    
    
    3,134
    
    
    $
    0.155Second Quarter
    
    
    18.12
    
    
    
    14.33
    
    
    
    4,779
    
    
    $
    0.155Third Quarter
    
    
    19.61
    
    
    
    15.60
    
    
    
    3,208
    
    
    $
    0.155Fourth Quarter
    
    
    19.10
    
    
    
    15.46
    
    
    
    3,001
    
    
    $
    0.155Fiscal Year Ended February 28, 2010First Quarter
    
    $
    11.17
    
    
    $
    6.91
    
    
    
    3,844
    
    
    $
    0.155Second Quarter
    
    
    15.25
    
    
    
    10.35
    
    
    
    3,966
    
    
    $
    0.155Third Quarter
    
    
    17.34
    
    
    
    13.33
    
    
    
    2,766
    
    
    $
    0.155Fourth Quarter
    
    
    17.39
    
    
    
    13.75
    
    
    
    2,147
    
    
    $
    0.155
   13




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Stock Performance Graph
  
 2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    2011Ennis, Inc.
    
    
    100.00
    
    
    
    134.71
    
    
    
    90.62
    
    
    
    46.04
    
    
    
    90.73
    
    
    
    99.53S&P 500
    
    
    100.00
    
    
    
    111.97
    
    
    
    107.94
    
    
    
    61.18
    
    
    
    93.98
    
    
    
    115.20Russell 2000
    
    
    100.00
    
    
    
    109.87
    
    
    
    96.21
    
    
    
    55.43
    
    
    
    90.88
    
    
    
    120.50
 The stock price performance included in this graph is not necessarily indicative of future
stock price performance.
 14




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ITEM 6. SELECTED FINANCIAL DATA
  Fiscal Years Ended2011
    
    2010
    
    2009
    
    2008
    
    2007(Dollars and shares in thousands, except per share amounts)Operating results:Net sales
    
    $
    549,999
    
    
    $
    517,738
    
    
    $
    584,029
    
    
    $
    610,610
    
    
    $
    584,713Gross profit margin
    
    
    154,498
    
    
    
    135,319
    
    
    
    143,476
    
    
    
    163,874
    
    
    
    156,322SG&A expenses
    
    
    83,678
    
    
    
    76,738
    
    
    
    86,217
    
    
    
    88,851
    
    
    
    83,121Impairment of goodwill
and trademarks
    
    
    
    
    
    
    
    
    
    
    67,851
    
    
    
    
    
    
    
    Net earnings (loss)
    
    
    44,631
    
    
    
    35,206
    
    
    
    (32,768
    )
    
    
    44,590
    
    
    
    41,601Earnings (loss) and dividends per share:Basic
    
    $
    1.73
    
    
    $
    1.37
    
    
    $
    (1.27
    )
    
    $
    1.74
    
    
    $
    1.63Diluted
    
    
    1.72
    
    
    
    1.36
    
    
    
    (1.27
    )
    
    
    1.72
    
    
    
    1.62Dividends
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62
    
    
    
    0.62Weighted average shares outstanding:Basic
    
    
    25,855
    
    
    
    25,769
    
    
    
    25,724
    
    
    
    25,697
    
    
    
    25,571Diluted
    
    
    25,888
    
    
    
    25,797
    
    
    
    25,790
    
    
    
    25,860
    
    
    
    25,759Financial Position:Working capital
    
    $
    135,300
    
    
    $
    116,638
    
    
    $
    138,374
    
    
    $
    133,993
    
    
    $
    102,269Current assets
    
    
    182,398
    
    
    
    166,439
    
    
    
    182,254
    
    
    
    185,819
    
    
    
    151,516Total assets
    
    
    473,728
    
    
    
    432,699
    
    
    
    436,380
    
    
    
    513,131
    
    
    
    478,228Current liabilities
    
    
    47,098
    
    
    
    49,801
    
    
    
    43,880
    
    
    
    51,826
    
    
    
    49,247Long-term debt
    
    
    50,000
    
    
    
    41,817
    
    
    
    76,185
    
    
    
    90,710
    
    
    
    88,971Total liabilities
    
    
    126,045
    
    
    
    119,439
    
    
    
    144,374
    
    
    
    164,652
    
    
    
    161,825Equity
    
    
    347,683
    
    
    
    313,260
    
    
    
    292,006
    
    
    
    348,479
    
    
    
    316,403Current ratio
    
    
    3.87 to 1.0
    
    
    
    3.34 to 1.0
    
    
    
    4.15 to 1.0
    
    
    
    3.59 to 1.0
    
    
    
    3.08 to 1.0Long-term debt to equity
    
    
    .14 to 1.0
    
    
    
    .13 to 1.0
    
    
    
    .26 to 1.0
    
    
    
    .26 to 1.0
    
    
    
    .28 to 1.0
 15




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    Overview An overall discussion on our Company, the business challenges and
opportunities we believe are key to our success, and our plans for facing these
challenges.
    
    Critical Accounting Policies and Estimates A discussion of the accounting
policies that require our most critical judgments and estimates. This discussion
provides insight into the level of subjectivity, quality, and variability involved
in these judgments and estimates. This section also provides a summary of recently
adopted and recently issued accounting pronouncements that have or may materially
affect our business.
    
    Results of Operations An analysis of our consolidated results of operations
and segment results for the three years presented in our consolidated financial
statements. This analysis discusses material trends within our business and
provides important information necessary for an understanding of our operating
results.
    
    Liquidity and Capital Resources An analysis of our cash flows and a
discussion of our financial condition and contractual obligations. This section
provides information necessary to evaluate our ability to generate cash and to meet
existing and known future cash requirements over both the short and long term.
  Overview
 The Company 
 Our Print Business Challenges 
 
    
    Transformation of our portfolio of products
    
    Excess production capacity and price competition within our industry
    
    Economic uncertainties
  16




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Transformation of our portfolio of products
 Excess production capacity and price competition within our industry
  Economic uncertainties
 Our Apparel Business Challenges 
 
    
    Cotton prices
 
    
    Start-up of and transition to our new manufacturing facility
 
    
    Economic uncertainties
 Cotton prices
 17




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Completion of new manufacturing facility
  Economic uncertainties
 Critical Accounting Policies and Estimates
     18




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Carrying Value of
    
    Fair Value ofReporting Unit
    
    Invested Capital
    
    Invested CapitalApparel
    
    $299.9 million
    
    $376.0 millionPrint
    
    $124.2 million
    
    $272.0 million
        19




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Recent Accounting Pronouncements
  Results of Operations
  
    
    Consolidated Summary this section provides an overview of our consolidated results of
operations for fiscal years 2011, 2010 and 2009.
 
    
    Segment Operating Results this section provides an analysis of our net sales, gross
profit margin and operating income by segment.
 Consolidated Summary
 Consolidated
    
    Fiscal Years EndedStatements of Earnings  Data
    
    2011
    
    
    2010
    
    
    2009Net sales
    
    $
    549,999
    
    
    
    100.0
    %
    
    $
    517,738
    
    
    
    100.0
    %
    
    $
    584,029
    
    
    
    100.0
    %Cost of goods sold
    
    
    395,501
    
    
    
    71.9
    
    
    
    382,419
    
    
    
    73.9
    
    
    
    440,553
    
    
    
    75.4Gross profit margin
    
    
    154,498
    
    
    
    28.1
    
    
    
    135,319
    
    
    
    26.1
    
    
    
    143,476
    
    
    
    24.6Selling, general and administrative
    
    
    83,678
    
    
    
    15.2
    
    
    
    76,738
    
    
    
    14.8
    
    
    
    86,217
    
    
    
    14.8Impairment of goodwill and
trademarks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.0
    
    
    
    67,851
    
    
    
    11.6Gain from disposal of assets
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    0.0
    
    
    
    (514
    )
    
    
    (0.1
    )Income (loss) from operations
    
    
    70,821
    
    
    
    12.9
    
    
    
    58,582
    
    
    
    11.3
    
    
    
    (10,078
    )
    
    
    (1.7
    )Other expense, net
    
    
    (1,404
    )
    
    
    (0.3
    )
    
    
    (2,913
    )
    
    
    (0.5
    )
    
    
    (2,981
    )
    
    
    (0.5
    )Earnings (loss) before income taxes
    
    
    69,417
    
    
    
    12.6
    
    
    
    55,669
    
    
    
    10.8
    
    
    
    (13,059
    )
    
    
    (2.2
    )Provision for income taxes
    
    
    24,786
    
    
    
    4.5
    
    
    
    20,463
    
    
    
    4.0
    
    
    
    19,709
    
    
    
    3.4Net earnings (loss)
    
    $
    44,631
    
    
    
    8.1
    %
    
    $
    35,206
    
    
    
    6.8
    %
    
    $
    (32,768
    )
    
    
    -5.6
    %
 Net Sales.
 Cost of Goods Sold.
  20




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Selling, general, and administrative expenses.
  Gain from disposal of assets.
 Income from operations.
  Other income and expense.
 Provision for income taxes.
 Net earnings.
  21




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Segment OperatingResults
 Fiscal Years EndedNet Sales by Segment (in thousands)
    
    2011
    
    
    2010
    
    
    2009Print
    
    $
    272,689
    
    
    $
    282,308
    
    
    $
    327,034Apparel
    
    
    277,310
    
    
    
    235,430
    
    
    
    256,995Total
    
    $
    549,999
    
    
    $
    517,738
    
    
    $
    584,029
 Print Segment
  Apparel Segment
  Fiscal Years EndedGross Profit by Segment (in thousands)
    
    2011
    
    
    2010
    
    
    2009Print
    
    $
    77,236
    
    
    $
    77,789
    
    
    $
    85,295Apparel
    
    
    77,262
    
    
    
    57,530
    
    
    
    58,181Total
    
    $
    154,498
    
    
    $
    135,319
    
    
    $
    143,476
 Print Segment.
 Apparel Segment
  22




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##### Table of Contents



Fiscal Years EndedProfit by Segment (in thousands)
    
    2011
    
    
    2010
    
    
    2009Print
    
    $
    46,002
    
    
    $
    46,047
    
    
    $
    51,553Apparel
    
    
    42,611
    
    
    
    24,778
    
    
    
    (49,416
    )Total
    
    
    88,613
    
    
    
    70,825
    
    
    
    2,137Less corporate expenses
    
    
    19,196
    
    
    
    15,156
    
    
    
    15,196Earnings (loss) before income taxes
    
    $
    69,417
    
    
    $
    55,669
    
    
    $
    (13,059
    )
 Print Segment
  Apparel Segment.
 Liquidity and Capital Resources
 Fiscal Years Ended(Dollars in thousands)
    
    2011
    
    2010
    
    ChangeWorking Capital
    
    $
    135,300
    
    
    $
    116,638
    
    
    
    16.0
    %Cash
    
    $
    12,305
    
    
    $
    21,063
    
    
    
    -41.6
    %
 Working Capital.
 Fiscal Years Ended(Dollars in thousands)
    
    2011
    
    2010
    
    ChangeNet Cash provided by operating activities
    
    $
    32,766
    
    
    $
    82,567
    
    
    
    -60.3
    %Net Cash used in investing activities
    
    $
    (35,985
    )
    
    $
    (20,244
    )
    
    
    77.8
    %Net Cash used in financing activities
    
    $
    (6,005
    )
    
    $
    (50,488
    )
    
    
    -88.1
    %
 Cash flows from operating activities.
 23




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Cash flows from investing activities.
 Cash flows from financing activities.
 Stock Repurchase 
 Credit Facility 
    Pension 
 24




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##### Table of Contents



Inventories 
 Capital Expenditures 
  Contractual Obligations & Off-Balance Sheet Arrangements 
 2016 toTotal
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2021Debt:Revolving credit facility
    
    $
    50,000
    
    
    $
    
    
    
    $
    50,000
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest rate swap
    
    
    586
    
    
    
    586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Debt and interest total
    
    
    50,586
    
    
    
    586
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    Other contractual commitments:Estimated pension benefit payments
    
    
    33,300
    
    
    
    2,600
    
    
    
    2,800
    
    
    
    3,400
    
    
    
    4,300
    
    
    
    20,200Letters of credit
    
    
    3,199
    
    
    
    3,199
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    12,306
    
    
    
    5,438
    
    
    
    3,183
    
    
    
    1,871
    
    
    
    1,006
    
    
    
    808Construction contract  Agua Prieta
    
    
    8,175
    
    
    
    8,175
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other contractual commitments
    
    
    56,980
    
    
    
    19,412
    
    
    
    5,983
    
    
    
    5,271
    
    
    
    5,306
    
    
    
    21,008Total
    
    $
    107,566
    
    
    $
    19,998
    
    
    $
    55,983
    
    
    $
    5,271
    
    
    $
    5,306
    
    
    $
    21,008
  25




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
 Cash
  Interest Rates
  Foreign Exchange
   
 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
 26




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   i.
    
    Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
assets of the Company;ii.
    
    Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; andiii.
    
    Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or dispositions of the Companys
assets that could have a material effect on the financial statements.
  Internal ControlIntegrated Framework
  
 ITEM 9B. OTHER INFORMATION
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   27




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##### Table of Contents



ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
   Number ofsecuritiesavailable forfuture issuancesNumber of
    
    
    
    
    
    
    under equitysecurities to be
    
    
    Weighted
    
    
    compensationissued upon
    
    
    average
    
    
    plans (excludingexercise of
    
    
    exercise price
    
    
    securitiesoutstanding
    
    
    of outstanding
    
    
    reflected inoptions
    
    
    options
    
    
    column (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    ( c )Equity compensation plans approved by the security
holders (1)
    
    
    342,723
    
    
    $
    14.31
    
    
    
    274,556Equity compensation plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    342,723
    
    
    $
    14.31
    
    
    
    274,556
 
 (1)
    
    The 2004 Long-Term Incentive Plan of Ennis, Inc., as amended and restated on May 14, 2008,
formerly the 1998 Option and Restricted Stock Plan, amended and restated as of June 17, 2004.
Includes 80,823 shares of restricted stock. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  28




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) Documents filed as a part of the report:
 (1)
    
    Index to Consolidated Financial Statements of the CompanyAn Index to Consolidated Financial Statements has been filed as a part of this Report
beginning on page F-1 hereof.(2)
    
    All schedules for which provision is made in the applicable accounting regulation
of the SEC have been omitted because of the absence of the conditions under which they
would be required or because the information required is included in the consolidated
financial statements of the Registrant or the notes thereto.(3)
    
    ExhibitsAn Index to Exhibits has been filed as a part of this Report beginning on page E-1 and
is herein incorporated by reference.
 29




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##### Table of Contents



SIGNATURES
  ENNIS, INC.Date: May 10, 2011
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board,Chief Executive Officer and PresidentDate: May 10, 2011
    BY:
    /s/ RICHARD L. TRAVIS, JR.Richard L. Travis, Jr.Senior Vice President  Finance and CFO, Secretary
and Principal Financial and Accounting Officer  Date: May 10, 2011
    BY:
    /s/ KEITH S. WALTERSKeith S. Walters, Chairman of the Board, ChiefExecutive Officer and PresidentDate: May 10, 2011
    BY:
    /s/ MICHAEL D. MAGILLMichael D. Magill, Executive Vice Presidentand DirectorDate: May 10, 2011
    BY:
    /s/ FRANK D. BRACKENFrank D. Bracken, DirectorDate: May 10, 2011
    BY:
    /s/ GODFREY M. LONG, JR.Godfrey M. Long, Jr., DirectorDate: May 10, 2011
    BY:
    /s/ THOMAS R. PRICEThomas R. Price, DirectorDate: May 10, 2011
    BY:
    /s/ KENNETH G. PRITCHETTKenneth G. Pritchett, DirectorDate: May 10, 2011
    BY:
    /s/ ALEJANDRO QUIROZAlejandro Quiroz, DirectorDate: May 10, 2011
    BY:
    /s/ MICHAEL J. SCHAEFERMichael J. Schaefer, DirectorDate: May 10, 2011
    BY:
    /s/ JAMES C. TAYLORJames C. Taylor, Director 30




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
Index to Consolidated Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    F-2Report of Independent Registered Public Accounting Firm
    
    F-3Consolidated Balance Sheets  February 28, 2011 and February 28, 2010
    
    F-4Consolidated Statements of Earnings  Fiscal years ended 2011, 2010 and 2009
    
    F-6Consolidated Statements of Changes in Shareholders Equity and Comprehensive
Income  Fiscal years ended 2011, 2010 and 2009
    
    F-7Consolidated Statements of Cash Flows  Fiscal years ended 2011, 2010 and 2009
    
    F-8Notes to Consolidated Financial Statements
    
    F-9
 F-1




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Report of Independent Registered Public Accounting Firm
 
    Internal ControlIntegrated Framework )
 /s/ Grant Thornton LLP 
 F-2




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated
Framework
    Internal ControlIntegrated Framework
  /s/ Grant Thornton LLP 
 F-3




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS  (Dollars in thousands)
 Fiscal Years Ended2011
    
    
    2010AssetsCurrent assetsCash
    
    $
    12,305
    
    
    $
    21,063Accounts receivable, net of allowance for doubtful receivables
of $4,814 at February 28, 2011 and $4,446 at February 28, 2010
    
    
    58,359
    
    
    
    57,249Prepaid expenses
    
    
    5,335
    
    
    
    6,867Inventories
    
    
    100,363
    
    
    
    75,137Deferred income taxes
    
    
    6,036
    
    
    
    5,319Assets held for sale
    
    
    
    
    
    
    804Total current assets
    
    
    182,398
    
    
    
    166,439Property, plant and equipment, at costPlant, machinery and equipment
    
    
    156,356
    
    
    
    138,419Land and buildings
    
    
    73,482
    
    
    
    55,430Other
    
    
    22,646
    
    
    
    22,402Total property, plant and equipment
    
    
    252,484
    
    
    
    216,251Less accumulated depreciation
    
    
    158,823
    
    
    
    150,531Net property, plant and equipment
    
    
    93,661
    
    
    
    65,720Goodwill
    
    
    117,341
    
    
    
    117,341Trademarks and tradenames, net
    
    
    58,765
    
    
    
    58,897Customer lists, net
    
    
    17,547
    
    
    
    19,753Deferred finance charges, net
    
    
    648
    
    
    
    1,079Other assets
    
    
    3,368
    
    
    
    3,470Total assets
    
    $
    473,728
    
    
    $
    432,699
  F-4




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except for share amounts)
 Fiscal Years Ended2011
    
    
    2010Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable
    
    $
    18,868
    
    
    $
    27,463Accrued expensesEmployee compensation and benefits
    
    
    16,503
    
    
    
    14,374Taxes other than income
    
    
    585
    
    
    
    1,539Federal and state income taxes payable
    
    
    2,935
    
    
    
    705Other
    
    
    7,621
    
    
    
    5,720Current installments of long-term debt
    
    
    586
    
    
    
    Total current liabilities
    
    
    47,098
    
    
    
    49,801Long-term debt
    
    
    50,000
    
    
    
    41,817Liability for pension benefits
    
    
    2,048
    
    
    
    7,132Deferred income taxes
    
    
    25,379
    
    
    
    19,821Other liabilities
    
    
    1,520
    
    
    
    868Total liabilities
    
    
    126,045
    
    
    
    119,439Commitments and contingenciesShareholders equityPreferred stock $10 par value,
authorized 1,000,000 shares; none issued
    
    
    
    
    
    
    Common stock $2.50 par value, authorized 40,000,000 shares;
issued 30,053,443 shares in 2011 and 2010
    
    
    75,134
    
    
    
    75,134Additional paid in capital
    
    
    121,306
    
    
    
    121,978Retained earnings
    
    
    234,636
    
    
    
    206,062Accumulated other comprehensive income (loss):Foreign currency translation, net of taxes
    
    
    1,727
    
    
    
    267Unrealized losson derivative instruments, net of taxes
    
    
    (372
    )
    
    
    (1,154
    )Minimum pension liability, net of taxes
    
    
    (9,803
    )
    
    
    (12,376
    )Total accumulated other comprehensive income (loss)
    
    
    (8,448
    )
    
    
    (13,263
    )Treasury stockCost of 4,197,567 shares in 2011 and 4,292,080 shares in 2010
    
    
    (74,945
    )
    
    
    (76,651
    )Total shareholders equity
    
    
    347,683
    
    
    
    313,260Total liabilities and shareholders equity
    
    $
    473,728
    
    
    $
    432,699
  F-5




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ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS  (Dollars in thousands, except share and per share amounts)
 Fiscal Years Ended2011
    
    
    2010
    
    
    2009Net sales
    
    $
    549,999
    
    
    $
    517,738
    
    
    $
    584,029Cost of goods sold
    
    
    395,501
    
    
    
    382,419
    
    
    
    440,553Gross profit margin
    
    
    154,498
    
    
    
    135,319
    
    
    
    143,476Selling, general and administrative
    
    
    83,678
    
    
    
    76,738
    
    
    
    86,217Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    63,151Impairment of trademarks
    
    
    
    
    
    
    
    
    
    
    4,700Gain from disposal of assets
    
    
    (1
    )
    
    
    (1
    )
    
    
    (514
    )Income (loss) from operations
    
    
    70,821
    
    
    
    58,582
    
    
    
    (10,078
    )Other income (expense)Interest expense
    
    
    (1,234
    )
    
    
    (2,627
    )
    
    
    (3,363
    )Other, net
    
    
    (170
    )
    
    
    (286
    )
    
    
    382(1,404
    )
    
    
    (2,913
    )
    
    
    (2,981
    )Earnings (loss) before income taxes
    
    
    69,417
    
    
    
    55,669
    
    
    
    (13,059
    )Provision for income taxes
    
    
    24,786
    
    
    
    20,463
    
    
    
    19,709Net earnings (loss)
    
    $
    44,631
    
    
    $
    35,206
    
    
    $
    (32,768
    )Weighted average common shares outstandingBasic
    
    
    25,855,129
    
    
    
    25,768,632
    
    
    
    25,724,150Diluted
    
    
    25,887,995
    
    
    
    25,796,553
    
    
    
    25,790,166Per share amountsNet earnings (loss)  basic
    
    $
    1.73
    
    
    $
    1.37
    
    
    $
    (1.27
    )Net earnings (loss)  diluted
    
    $
    1.72
    
    
    $
    1.36
    
    
    $
    (1.27
    )Cash dividends per share
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
  F-6




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY AND
COMPREHENSIVE INCOME FOR THE FISCAL YEARS ENDED 2009, 2010, AND 2011
 (Dollars in thousands, except share and per share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury StockShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Shares
    
    
    Amount
    
    
    TotalBalance March 1, 2008
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,566
    
    
    $
    235,624
    
    
    $
    (5,521
    )
    
    
    (4,391,193
    )
    
    $
    (79,324
    )
    
    $
    348,479Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,768
    )Foreign currency translation,
net of deferred tax of $1,142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,945
    )
    
    
    
    
    
    
    
    
    
    
    (1,945
    )Unrealized loss on
derivative instruments, net
of deferred tax of $797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,387
    )
    
    
    
    
    
    
    
    
    
    
    (1,387
    )Adjustment to pension,
net of deferred tax of $3,252
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,657
    )
    
    
    
    
    
    
    
    
    
    
    (5,657
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (41,757
    )Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,999
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    249
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249Stock based compensation
    
    
    
    
    
    
    
    
    
    
    993
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,360
    )
    
    
    
    
    
    
    
    
    
    
    107,336
    
    
    
    2,000
    
    
    
    640Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,700
    )
    
    
    (599
    )
    
    
    (599
    )Balance February 28, 2009
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    122,448
    
    
    $
    186,857
    
    
    $
    (14,510
    )
    
    
    (4,336,557
    )
    
    $
    (77,923
    )
    
    $
    292,006Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,206
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,206Foreign currency translation,
net of deferred tax of $754
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,283
    
    
    
    
    
    
    
    
    
    
    
    1,283Unrealized gain on
derivative instruments, net
of deferred tax benefit of $137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    233Adjustment to pension,
net of deferred tax of $158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (269
    )
    
    
    
    
    
    
    
    
    
    
    (269
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,453Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,001
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,001
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Stock based compensation
    
    
    
    
    
    
    
    
    
    
    1,079
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,079Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,650
    )
    
    
    
    
    
    
    
    
    
    
    93,034
    
    
    
    1,758
    
    
    
    108Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,557
    )
    
    
    (486
    )
    
    
    (486
    )Balance February 28, 2010
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    121,978
    
    
    $
    206,062
    
    
    $
    (13,263
    )
    
    
    (4,292,080
    )
    
    $
    (76,651
    )
    
    $
    313,260Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,631
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,631Foreign currency translation,
net of deferred tax of $811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,460
    
    
    
    
    
    
    
    
    
    
    
    1,460Unrealized gain on
derivative instruments, net
of deferred tax benefit of $434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    782
    
    
    
    
    
    
    
    
    
    
    
    782Adjustment to pension,
net of deferred tax of $1,429
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,573
    
    
    
    
    
    
    
    
    
    
    
    2,573Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,446Dividends declared
($.62 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,057
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,057
    )Excess tax benefit of stock
option exercises and restricted
stock grants
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49
    )Stock based compensation
    
    
    
    
    
    
    
    
    
    
    982
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    982Exercise of stock options
and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    (1,605
    )
    
    
    
    
    
    
    
    
    
    
    94,604
    
    
    
    1,708
    
    
    
    103Stock repurchases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    (2
    )
    
    
    (2
    )Balance February 28, 2011
    
    
    30,053,443
    
    
    $
    75,134
    
    
    $
    121,306
    
    
    $
    234,636
    
    
    $
    (8,448
    )
    
    
    (4,197,567
    )
    
    $
    (74,945
    )
    
    $
    347,683
  F-7




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Fiscal Years Ended2011
    
    
    2010
    
    
    2009Cash flows from operating activities:Net earnings (loss)
    
    $
    44,631
    
    
    $
    35,206
    
    
    $
    (32,768
    )Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Depreciation
    
    
    8,066
    
    
    
    8,976
    
    
    
    9,993Amortization of deferred finance charges
    
    
    432
    
    
    
    438
    
    
    
    448Amortization of tradenames and customer lists
    
    
    2,399
    
    
    
    2,403
    
    
    
    2,419Impairment of goodwill and trademarks
    
    
    
    
    
    
    
    
    
    
    67,851Gain from disposal of assets
    
    
    (1
    )
    
    
    (1
    )
    
    
    (514
    )Bad debt expense
    
    
    1,952
    
    
    
    2,182
    
    
    
    3,609Stock based compensation
    
    
    982
    
    
    
    1,079
    
    
    
    993Excess tax benefit of stock based compensation
    
    
    49
    
    
    
    (101
    )
    
    
    (249
    )Deferred income taxes
    
    
    4,365
    
    
    
    2,705
    
    
    
    (4,265
    )Changes in operating assets and liabilities, net of the
effects of acquisitions:Accounts receivable
    
    
    (1,643
    )
    
    
    (1,614
    )
    
    
    10,580Prepaid expenses
    
    
    1,718
    
    
    
    1,867
    
    
    
    (5,313
    )Inventories
    
    
    (23,753
    )
    
    
    27,096
    
    
    
    (4,154
    )Other current assets
    
    
    (717
    )
    
    
    409
    
    
    
    2,058Other assets
    
    
    90
    
    
    
    (3,927
    )
    
    
    (4
    )Accounts payable and accrued expenses
    
    
    (3,945
    )
    
    
    6,177
    
    
    
    (7,789
    )Other liabilities
    
    
    652
    
    
    
    (203
    )
    
    
    (270
    )Prepaid pension asset/liability for pension benefits
    
    
    (2,511
    )
    
    
    (125
    )
    
    
    1,591Net cash provided by operating activities
    
    
    32,766
    
    
    
    82,567
    
    
    
    44,216Cash flows from investing activities:Capital expenditures
    
    
    (33,753
    )
    
    
    (20,280
    )
    
    
    (6,399
    )Purchase of businesses, net of cash acquired
    
    
    (2,237
    )
    
    
    
    
    
    
    Proceeds from disposal of plant and property
    
    
    5
    
    
    
    36
    
    
    
    1,049Net cash used in investing activities
    
    
    (35,985
    )
    
    
    (20,244
    )
    
    
    (5,350
    )Cash flows from financing activities:Borrowings on debt
    
    
    10,000
    
    
    
    
    
    
    
    5,000Repayment of debt
    
    
    
    
    
    
    (34,210
    )
    
    
    (21,755
    )Dividends
    
    
    (16,057
    )
    
    
    (16,001
    )
    
    
    (15,999
    )Purchase of treasury stock
    
    
    (2
    )
    
    
    (486
    )
    
    
    (599
    )Proceeds from exercise of stock options
    
    
    103
    
    
    
    108
    
    
    
    640Excess tax benefit of stock based compensation
    
    
    (49
    )
    
    
    101
    
    
    
    249Net cash used in financing activities
    
    
    (6,005
    )
    
    
    (50,488
    )
    
    
    (32,464
    )Effect of exchange rate changes on cash
    
    
    466
    
    
    
    (58
    )
    
    
    (509
    )Net change in cash
    
    
    (8,758
    )
    
    
    11,777
    
    
    
    5,893Cash at beginning of period
    
    
    21,063
    
    
    
    9,286
    
    
    
    3,393Cash at end of period
    
    $
    12,305
    
    
    $
    21,063
    
    
    $
    9,286
  F-8




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters
 Nature of Operations.
 Basis of Consolidation.
 Accounts Receivable.
 Inventories.
 Property, Plant and Equipment
 Goodwill and Other Intangible Assets.
 Long-Lived Assets
 F-9




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
 Fair Value of Financial Instruments
 Treasury Stock
 Deferred Finance Charges
 Revenue Recognition
 Advertising Expenses
 Income Taxes.
 Earnings (Loss) Per Share
 Accumulated Other Comprehensive Income (Loss)
 Derivative Instruments and Hedging Activities.
 F-10




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) Significant Accounting Policies and General Matters-continued
  Foreign Currency Translation.
  Estimates.
 Shipping and Handling Costs.
 Stock Based Compensation.
 Concentrations of Risk
   (2) Accounts Receivable and Allowance for Doubtful Receivables
  F-11




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (2) Accounts Receivable and Allowance for Doubtful Receivables-continued
   2011
    
    
    2010
    
    
    2009Balance at beginning of period
    
    $
    4,446
    
    
    $
    3,561
    
    
    $
    3,954Bad debt expense
    
    
    1,952
    
    
    
    2,182
    
    
    
    3,609Recoveries
    
    
    105
    
    
    
    34
    
    
    
    24Accounts written off
    
    
    (1,696
    )
    
    
    (1,297
    )
    
    
    (4,026
    )Foreign currency translation
    
    
    7
    
    
    
    (34
    )
    
    
    Balance at end of period
    
    $
    4,814
    
    
    $
    4,446
    
    
    $
    3,561
 (3) Inventories
  2011
    
    
    2010Raw material
    
    $
    11,237
    
    
    $
    11,089Work-in-process
    
    
    13,453
    
    
    
    14,280Finished goods
    
    
    75,673
    
    
    
    49,768$
    100,363
    
    
    $
    75,137
  (4) Goodwill and Other Intangible Assets
    F-12




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (4) Goodwill and Other Intangible Assets-continued
  GrossCarrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetAs of February 28, 2011Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    1,007
    
    
    $
    227Customer lists
    
    
    29,957
    
    
    
    12,410
    
    
    
    17,547Noncompete
    
    
    500
    
    
    
    495
    
    
    
    5$
    31,691
    
    
    $
    13,912
    
    
    $
    17,779As of February 28, 2010Amortized intangible assets (in thousands)Tradenames
    
    $
    1,234
    
    
    $
    875
    
    
    $
    359Customer lists
    
    
    29,908
    
    
    
    10,155
    
    
    
    19,753Noncompete
    
    
    500
    
    
    
    483
    
    
    
    17$
    31,642
    
    
    $
    11,513
    
    
    $
    20,129
 Fiscal years ended2011
    
    
    2010Non-amortizing intangible assets (in thousands)Trademarks
    
    $
    58,538
    
    
    $
    58,538
   2012
    
    $
    2,3962013
    
    
    2,3522014
    
    
    2,2592015
    
    
    2,1412016
    
    
    2,083
  Print
    
    
    ApparelSegment
    
    
    SegmentTotal
    
    
    Total
    
    
    TotalBalance as of March 1, 2009
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    Balance as of March 1, 2010
    
    
    42,792
    
    
    
    74,549
    
    
    
    117,341Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    Balance as of February 28, 2011
    
    $
    42,792
    
    
    $
    74,549
    
    
    $
    117,341
  F-13




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (5) Other Accrued Expenses
  February 28, 2011
    
    
    February 28, 2010Accrued taxes
    
    $
    229
    
    
    $
    265Accrued legal and professional fees
    
    
    499
    
    
    
    392Accrued interest
    
    
    158
    
    
    
    114Accrued utilities
    
    
    1,038
    
    
    
    1,322Accrued repairs and maintenance
    
    
    684
    
    
    
    547Accrued construction retainage
    
    
    2,020
    
    
    
    582Accrued phantom stock obligation
    
    
    452
    
    
    
    422Accrued acquisition related obligations
    
    
    243
    
    
    
    594Other accrued expenses
    
    
    2,298
    
    
    
    1,482$
    7,621
    
    
    $
    5,720
 (6) Derivative Instruments and Hedging Activities
   (7) Fair Value Financial Instruments
   Level 1 
    
    Inputs utilize quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access.Level 2 
    
    Inputs utilize data points that are observable such as quoted prices,
interest rates and yield curves.Level 3 
    
    Inputs are unobservable data points for the asset or liability, and
include situations where there is little, if any, market activity for the asset or
liability.
  F-14




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (7) Fair Value Financial Instruments-continued
  February 28,
    
    
    Fair Value MeasurementsDescription
    
    2011
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (586
    )
    
    $
    
    
    
    $
    (586
    )
    
    $
    $
    (586
    )
    
    $
    
    
    
    $
    (586
    )
    
    $
    
 February 28,
    
    
    Fair Value MeasurementsDescription
    
    2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative liability (Swap)
    
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    $
    (1,817
    )
    
    $
    
    
    
    $
    (1,817
    )
    
    $
    
 (8) Long-Term Debt
  February 28, 2011
    
    
    February 28, 2010Revolving credit facility
    
    $
    50,000
    
    
    $
    40,000Interest rate swap
    
    
    586
    
    
    
    1,817Long-term debt
    
    $
    50,586
    
    
    $
    41,817
    Debt2012
    
    $
    5862013
    
    
    50,000$
    50,586
 F-15




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (9) Shareholders Equity
   (10) Stock Option Plan and Stock Based Compensation
   F-16




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Stock Option Plan and Stock Based Compensation-continued
 Stock Options
  WeightedNumber
    
    Weighted
    
    Average
    
    Aggregateof
    
    Average
    
    Remaining
    
    IntrinsicShares
    
    Exercise
    
    Contractual
    
    Value(a)(exact quantity)
    
    Price
    
    Life (in years)
    
    (in thousands)Outstanding at March 1, 2008
    
    
    469,513
    
    
    $
    10.97
    
    
    
    2.9Granted
    
    
    
    
    
    
    Terminated
    
    
    (46,450
    )
    
    
    12.31Exercised
    
    
    (104,500
    )
    
    
    10.34Outstanding at February 28, 2009
    
    
    318,563
    
    
    $
    10.98
    
    
    
    2.4Granted
    
    
    105,000
    
    
    
    8.94Terminated
    
    
    (115,000
    )
    
    
    8.69Exercised
    
    
    (58,363
    )
    
    
    7.06Outstanding at February 28, 2010
    
    
    250,200
    
    
    $
    12.09
    
    
    
    6.0
    
    
    $
    1,003Granted
    
    
    62,500
    
    
    
    18.46Terminated
    
    
    (11,300
    )
    
    
    10.18Exercised
    
    
    (39,500
    )
    
    
    7.99Outstanding at February 28, 2011
    
    
    261,900
    
    
    $
    14.31
    
    
    
    6.5
    
    
    $
    757Exercisable at February 28, 2011
    
    
    128,150
    
    
    $
    15.27
    
    
    
    4.3
    
    
    $
    237
 
 (a)
    
    Intrinsic value is measured as the excess fair market value of the Companys Common Stock as
reported on the
New York Stock Exchange over the applicable exercise price.  2011
    
    2010Expected volatility
    
    
    34.63
    %
    
    
    32.35
    %Expected term (years)
    
    
    3
    
    
    
    4Risk free interest rate
    
    
    1.58
    %
    
    
    2.01
    %Dividend yield
    
    
    4.24
    %
    
    
    4.74
    %Weighted average grant-date fair value
    
    $
    3.35
    
    
    $
    1.58
  Fiscal years ended2011
    
    2010
    
    2009Total cash received
    
    $
    103
    
    
    $
    108
    
    
    $
    640Income tax (expense) benefit
    
    
    (49
    )
    
    
    101
    
    
    
    249Total grant-date fair value
    
    
    38
    
    
    
    42
    
    
    
    134Intrinsic value
    
    
    339
    
    
    
    408
    
    
    
    536
 F-17




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Stock Option Plan and Stock Based Compensation-continued
  WeightedAverageNumber
    
    Grant Dateof Options
    
    Fair ValueUnvested at February 28, 2010
    
    
    110,000
    
    
    $
    1.64New grants
    
    
    62,500
    
    
    
    3.35Vested
    
    
    (31,250
    )
    
    
    1.79Forfeited
    
    
    (7,500
    )
    
    
    1.58Unvested at February 28, 2011
    
    
    133,750
    
    
    $
    2.41
   Options Outstanding
    
    Options ExercisableWeighted Average
    
    Weighted
    
    
    
    
    
    WeightedNumber
    
    Remaining Contractual
    
    Average
    
    Number
    
    AverageExercise Prices
    
    Outstanding
    
    Life (in Years)
    
    Exercise Price
    
    Exercisable
    
    Exercise Price$8.9400 to $11.6700
    
    
    101,750
    
    
    
    7.6
    
    
    $
    9.21
    
    
    
    30,500
    
    
    $
    9.8413.2800 to 16.4200
    
    
    66,450
    
    
    
    3.2
    
    
    
    15.69
    
    
    
    66,450
    
    
    
    15.6918.4600 to 19.6900
    
    
    93,700
    
    
    
    7.8
    
    
    
    18.87
    
    
    
    31,200
    
    
    
    19.69261,900
    
    
    
    6.5
    
    
    
    14.31
    
    
    
    128,150
    
    
    
    15.27
 Restricted Stock
  WeightedAverageNumber of
    
    Grant DateShares
    
    Fair ValueOutstanding at March 1, 2008
    
    
    73,916
    
    
    $
    25.12Granted
    
    
    75,080
    
    
    
    15.67Terminated
    
    
    (15,236
    )
    
    
    19.89Vested
    
    
    (30,669
    )
    
    
    24.05Outstanding at February 28, 2009
    
    
    103,091
    
    
    $
    19.33Granted
    
    
    44,800
    
    
    
    8.94Terminated
    
    
    
    
    
    
    Vested
    
    
    (56,421
    )
    
    
    17.48Outstanding at February 28, 2010
    
    
    91,470
    
    
    $
    15.38Granted
    
    
    57,655
    
    
    
    17.34Terminated
    
    
    (268
    )
    
    
    15.49Vested
    
    
    (68,034
    )
    
    
    16.79Outstanding at February 28, 2011
    
    
    80,823
    
    
    $
    15.59
 F-18




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (10) Stock Option Plan and Stock Based Compensation-continued
  (11) Employee Benefit Plans
   2011
    
    2010Equity securities
    
    
    52
    %
    
    
    54
    %Debt securities
    
    
    41
    %
    
    
    42
    %Cash and cash equivalents
    
    
    7
    %
    
    
    4
    %Total
    
    
    100
    %
    
    
    100
    %
  Target AllocationAsset Class
    
    PercentageMoney Market
    
    
    0 - 3
    %Bonds
    
    
    43 - 47
    %Stocks
    
    
    45 - 50
    %
  F-19




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
  AssetsMeasured atFair Value
    
    
    Fair Value MeasurementsDescription
    
    at 2/28/11
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    2,742
    
    
    $
    2,742
    
    
    $
    
    
    
    $
    Government bonds
    
    
    10,487
    
    
    
    
    
    
    
    10,487
    
    
    
    Corporate bonds
    
    
    6,601
    
    
    
    
    
    
    
    6,601
    
    
    
    Domestic equities
    
    
    18,002
    
    
    
    18,002
    
    
    
    
    
    
    
    Foreign equities
    
    
    3,758
    
    
    
    3,758
    
    
    
    
    
    
    
    $
    41,590
    
    
    $
    24,502
    
    
    $
    17,088
    
    
    $
    
 AssetsMeasured atFair Value
    
    
    Fair Value MeasurementsDescription
    
    at 2/28/10
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Cash and cash equivalents
    
    $
    1,354
    
    
    $
    1,354
    
    
    $
    
    
    
    $
    Government bonds
    
    
    9,750
    
    
    
    
    
    
    
    9,750
    
    
    
    Corporate bonds
    
    
    6,750
    
    
    
    
    
    
    
    6,750
    
    
    
    Domestic equities
    
    
    17,706
    
    
    
    17,706
    
    
    
    
    
    
    
    Foreign equities
    
    
    3,562
    
    
    
    3,562
    
    
    
    
    
    
    
    $
    39,122
    
    
    $
    22,622
    
    
    $
    16,500
    
    
    $
    
   F-20




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
 2011
    
    
    2010
    
    
    2009Components of net periodic benefit costService cost
    
    $
    1,214
    
    
    $
    1,138
    
    
    $
    1,341Interest cost
    
    
    2,618
    
    
    
    2,741
    
    
    
    2,627Expected return on plan assets
    
    
    (3,062
    )
    
    
    (2,423
    )
    
    
    (3,249
    )Amortization of:Prior service cost
    
    
    (145
    )
    
    
    (145
    )
    
    
    (145
    )Unrecognized net loss
    
    
    1,344
    
    
    
    1,698
    
    
    
    766Net periodic benefit cost
    
    
    1,969
    
    
    
    3,009
    
    
    
    1,340Other changes in Plan Assets and Projected
Benefit ObligationRecognized in Other comprehensive IncomeNet actuarial loss (gain)
    
    
    (2,854
    )
    
    
    1,688
    
    
    
    9,529Amortization of net actuarial loss
    
    
    (1,344
    )
    
    
    (1,698
    )
    
    
    (766
    )Amortization of prior service credit
    
    
    145
    
    
    
    145
    
    
    
    145(4,053
    )
    
    
    135
    
    
    
    8,908Total recognized in net periodic pension cost and
other comprehensive income
    
    $
    (2,084
    )
    
    $
    3,144
    
    
    $
    10,248
  2011
    
    2010
    
    2009Weighted average discount rate (net periodic pension cost)
    
    
    6.05
    %
    
    
    7.15
    %
    
    
    6.40
    %Earnings progression (net periodic pension cost)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %Expected long-term rate of return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %
    
    
    8.00
    %Weighted average discount rate (benefit obligations)
    
    
    5.85
    %
    
    
    6.05
    %
    
    
    7.15
    %Earnings progression (benefit obligations)
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %
  2011
    
    
    2010Change in benefit obligationProjected benefit obligation at beginning of year
    
    $
    46,254
    
    
    $
    38,951Service cost
    
    
    1,214
    
    
    
    1,138Interest cost
    
    
    2,618
    
    
    
    2,741Actuarial (gain)/loss
    
    
    (865
    )
    
    
    7,926Benefits paid
    
    
    (5,583
    )
    
    
    (4,502
    )Projected benefit obligation at end of year
    
    $
    43,638
    
    
    $
    46,254Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    39,122
    
    
    $
    31,963Company contributions
    
    
    3,000
    
    
    
    3,000Gains on plan assets
    
    
    5,051
    
    
    
    8,661Benefits paid
    
    
    (5,583
    )
    
    
    (4,502
    )Fair value of plan assets at end of year
    
    $
    41,590
    
    
    $
    39,122Funded status (benefit obligation less plan assets)
    
    $
    (2,048
    )
    
    $
    (7,132
    )Accumulated benefit obligation at end of year
    
    $
    39,785
    
    
    $
    40,852
 F-21




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (11) Employee Benefit Plans-continued
   ProjectedYear
    
    Payments2012
    
    $
    2,6002013
    
    
    2,8002014
    
    
    3,4002015
    
    
    4,3002016
    
    
    2,9002017 - 2021
    
    
    17,300
   (12) Income Taxes
  2011
    
    
    2010
    
    
    2009Current:Federal
    
    $
    18,167
    
    
    $
    16,357
    
    
    $
    14,723State and local
    
    
    3,535
    
    
    
    3,104
    
    
    
    3,444Foreign
    
    
    866
    
    
    
    857
    
    
    
    573Deferred
    
    
    2,218
    
    
    
    145
    
    
    
    969Total provision for income taxes
    
    $
    24,786
    
    
    $
    20,463
    
    
    $
    19,709
  F-22




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (12) Income Taxes-continued
 2011
    
    2010
    
    2009Statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %Provision for state income taxes, net of
Federal income tax benefit
    
    
    3.1
    
    
    
    3.7
    
    
    
    (18.4
    )Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    (169.3
    )Domestic production activities deduction
    
    
    (3.0
    )
    
    
    (2.0
    )
    
    
    8.6Other
    
    
    0.6
    
    
    
    0.1
    
    
    
    (6.8
    )35.7
    %
    
    
    36.8
    %
    
    
    -150.9
    %
   2011
    
    
    2010Current deferred tax assets related to:Allowance for doubtful receivables
    
    $
    1,833
    
    
    $
    1,718Inventories
    
    
    1,910
    
    
    
    1,916Employee compensation and benefits
    
    
    1,942
    
    
    
    1,625Other
    
    
    351
    
    
    
    60$
    6,036
    
    
    $
    5,319Noncurrent deferred tax liability (asset) related to:Property, plant and equipment
    
    $
    4,940
    
    
    $
    3,891Goodwill and other intangible assets
    
    
    21,527
    
    
    
    20,898Pension and noncurrent employee compensation benefits
    
    
    (1,955
    )
    
    
    (3,816
    )Net operating loss and foreign tax credits
    
    
    (315
    )
    
    
    (378
    )Property tax
    
    
    881
    
    
    
    Interest rate swap
    
    
    (225
    )
    
    
    (702
    )Currency exchange
    
    
    567
    
    
    
    232Stock options exercised
    
    
    (303
    )
    
    
    (570
    )Valuation allowance
    
    
    247
    
    
    
    247Other
    
    
    15
    
    
    
    19$
    25,379
    
    
    $
    19,821
  F-23




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 12) Income Taxes-continued
   2011
    
    
    2010Balance at beginning of year
    
    $
    147
    
    
    $
    243Additions (reductions) based on tax positions
related to the current year
    
    
    43
    
    
    
    (15
    )Reductions due to lapses of statutes of limitations
    
    
    (49
    )
    
    
    (81
    )Balance at end of year
    
    $
    141
    
    
    $
    147
   (13) Earnings (loss) per Share
  2011
    
    
    2010
    
    
    2009Basic weighted average common
shares outstanding
    
    
    25,855,129
    
    
    
    25,768,632
    
    
    
    25,724,150Effect of dilutive options
    
    
    32,866
    
    
    
    27,921
    
    
    
    66,016Diluted weighted average common
shares outstanding
    
    
    25,887,995
    
    
    
    25,796,553
    
    
    
    25,790,166Per share amounts:Net earnings  basic
    
    $
    1.73
    
    
    $
    1.37
    
    
    $
    (1.27
    )Net earnings  diluted
    
    $
    1.72
    
    
    $
    1.36
    
    
    $
    (1.27
    )Cash dividends
    
    $
    0.62
    
    
    $
    0.62
    
    
    $
    0.62
  F-24




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Segment Information and Geographic Information
   ® ® ® SM SM ® ® SM SM ® ® ® ® SM SM ® ® ® ®
     Print
    
    Apparel
    
    
    
    
    
    ConsolidatedSegment
    
    Segment
    
    Corporate
    
    TotalsFiscal year ended February 28, 2011:Net sales
    
    $
    272,689
    
    
    $
    277,310
    
    
    $
    
    
    
    $
    549,999Depreciation
    
    
    5,396
    
    
    
    1,943
    
    
    
    727
    
    
    
    8,066Amortization of identifiable intangibles
    
    
    933
    
    
    
    1,466
    
    
    
    
    
    
    
    2,399Segment earnings (loss) before
income tax
    
    
    46,002
    
    
    
    42,611
    
    
    
    (19,196
    )
    
    
    69,417Segment assets
    
    
    136,255
    
    
    
    321,908
    
    
    
    15,565
    
    
    
    473,728Capital expenditures
    
    
    2,176
    
    
    
    31,549
    
    
    
    28
    
    
    
    33,753
 F-25




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Segment Information and Geographic Information-continued
 Print
    
    Apparel
    
    
    
    
    
    ConsolidatedSegment
    
    Segment
    
    Corporate
    
    TotalsFiscal year ended February 28, 2010:Net sales
    
    $
    282,308
    
    
    $
    235,430
    
    
    $
    
    
    
    $
    517,738Depreciation
    
    
    5,970
    
    
    
    2,168
    
    
    
    838
    
    
    
    8,976Amortization of identifiable intangibles
    
    
    937
    
    
    
    1,466
    
    
    
    
    
    
    
    2,403Segment
earnings (loss) before income tax
    
    
    46,047
    
    
    
    24,778
    
    
    
    (15,156
    )
    
    
    55,669Segment assets
    
    
    140,734
    
    
    
    270,680
    
    
    
    21,285
    
    
    
    432,699Capital expenditures
    
    
    2,522
    
    
    
    17,661
    
    
    
    97
    
    
    
    20,280Fiscal year ended February 28, 2009:Net sales
    
    $
    327,034
    
    
    $
    256,995
    
    
    $
    
    
    
    $
    584,029Depreciation
    
    
    6,406
    
    
    
    2,640
    
    
    
    947
    
    
    
    9,993Amortization of identifiable intangibles
    
    
    952
    
    
    
    1,467
    
    
    
    
    
    
    
    2,419Impairment of goodwill and trademarks
    
    
    
    
    
    
    67,851
    
    
    
    
    
    
    
    67,851Segment
earnings (loss) before income tax
    
    
    51,553
    
    
    
    (49,416
    )
    
    
    (15,196
    )
    
    
    (13,059
    )Segment assets
    
    
    152,971
    
    
    
    267,499
    
    
    
    15,910
    
    
    
    436,380Capital expenditures
    
    
    5,973
    
    
    
    324
    
    
    
    102
    
    
    
    6,399
  United States
    
    
    Canada
    
    
    Mexico
    
    
    Total2011Net sales to unaffiliated customersPrint Segment
    
    $
    272,689
    
    
    $
    
    
    
    $
    
    
    
    $
    272,689Apparel Segment
    
    
    253,172
    
    
    
    22,227
    
    
    
    1,911
    
    
    
    277,310$
    525,861
    
    
    $
    22,227
    
    
    $
    1,911
    
    
    $
    549,999Identifiable long-lived assetsPrint Segment
    
    $
    35,867
    
    
    $
    
    
    
    $
    
    
    
    
    35,867Apparel Segment
    
    
    1,901
    
    
    
    33
    
    
    
    51,968
    
    
    
    53,902Corporate
    
    
    3,892
    
    
    
    
    
    
    
    
    
    
    
    3,892$
    41,660
    
    
    $
    33
    
    
    $
    51,968
    
    
    $
    93,6612010Net sales to unaffiliated customersPrint Segment
    
    $
    282,308
    
    
    $
    
    
    
    $
    
    
    
    $
    282,308Apparel Segment
    
    
    217,442
    
    
    
    15,183
    
    
    
    2,805
    
    
    
    235,430$
    499,750
    
    
    $
    15,183
    
    
    $
    2,805
    
    
    $
    517,738Identifiable long-lived assetsPrint Segment
    
    $
    37,984
    
    
    $
    
    
    
    $
    
    
    
    
    37,984Apparel Segment
    
    
    9,508
    
    
    
    33
    
    
    
    13,602
    
    
    
    23,143Corporate
    
    
    4,593
    
    
    
    
    
    
    
    
    
    
    
    4,593$
    52,085
    
    
    $
    33
    
    
    $
    13,602
    
    
    $
    65,720
 F-26




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (14) Segment Information and Geographic Information-continued
 United States
    
    
    Canada
    
    
    Mexico
    
    
    Total2009Net sales to unaffiliated customersPrint Segment
    
    $
    327,034
    
    
    $
    
    
    
    $
    
    
    
    $
    327,034Apparel Segment
    
    
    240,798
    
    
    
    14,913
    
    
    
    1,284
    
    
    
    256,995$
    567,832
    
    
    $
    14,913
    
    
    $
    1,284
    
    
    $
    584,029Identifiable long-lived assetsPrint Segment
    
    $
    42,272
    
    
    $
    
    
    
    $
    
    
    
    
    42,272Apparel Segment
    
    
    5,856
    
    
    
    38
    
    
    
    1,173
    
    
    
    7,067Corporate
    
    
    5,333
    
    
    
    
    
    
    
    
    
    
    
    5,333$
    53,461
    
    
    $
    38
    
    
    $
    1,173
    
    
    $
    54,672
 (15) Commitments and Contingencies
  OperatingLeaseCommitments2012
    
    $
    5,4382013
    
    
    3,1832014
    
    
    1,8712015
    
    
    1,0062016
    
    
    808$
    12,306
    (16) Supplemental Cash Flow Information
  2011
    
    2010
    
    2009Interest paid
    
    $
    2,938
    
    
    $
    2,641
    
    
    $
    3,838Income taxes paid
    
    $
    20,143
    
    
    $
    15,539
    
    
    $
    24,522
 F-27




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (16) Supplemental Cash Flow Information-continued
  2011
    
    2010
    
    2009Fair value of assets acquired in acquisitions
    
    $
    2,699
    
    
    $
    
    
    
    $
    Liabilities assumed in acquisitions
    
    $
    462
    
    
    $
    
    
    
    $
    
 (17) Quarterly Consolidated Financial Information (Unaudited)
  For the Three Months Ended
    
    May 31
    
    August 31
    
    November 30
    
    February 28Fiscal year ended 2011:Net sales
    
    $
    140,741
    
    
    $
    143,034
    
    
    $
    134,817
    
    
    $
    131,407Gross profit margin
    
    
    42,180
    
    
    
    39,708
    
    
    
    36,519
    
    
    
    36,091Net earnings
    
    
    13,040
    
    
    
    12,129
    
    
    
    9,643
    
    
    
    9,819Dividends paid
    
    
    4,006
    
    
    
    4,017
    
    
    
    4,017
    
    
    
    4,017Per share of common stock:Basic net earnings
    
    $
    0.51
    
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.38Diluted net earnings
    
    $
    0.50
    
    
    $
    0.47
    
    
    $
    0.37
    
    
    $
    0.38Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155Fiscal year ended 2010:Net sales
    
    $
    130,830
    
    
    $
    137,767
    
    
    $
    127,756
    
    
    $
    121,385Gross profit marign
    
    
    30,984
    
    
    
    35,822
    
    
    
    34,300
    
    
    
    34,213Net earnings
    
    
    6,635
    
    
    
    9,546
    
    
    
    9,191
    
    
    
    9,834Dividends paid
    
    
    4,002
    
    
    
    3,994
    
    
    
    4,003
    
    
    
    4,002Per share of common stock:Basic net earnings
    
    $
    0.26
    
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.38Diluted net earnings
    
    $
    0.26
    
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.38Dividends
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
    
    
    $
    0.155
 Current Quarter Compared to Same Quarter Last Year
  (18) Concentrations of Risk
  F-28




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##### Table of Contents



ENNIS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (18) Concentrations of Risk-continued
   (19) Subsequent Events
 1 2
 F-29




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit Number
    
    Description of DocumentExhibit 3.1(a)
    
    Restated Articles of Incorporation as amended through June 23, 1983 with
attached amendments dated June 20, 1985, July 31, 1985 and June 16, 1988
incorporated herein by reference to Exhibit 5 to the Registrants Annual
Report on Form 10-K for the fiscal year ended February 28, 1993.Exhibit 3.1(b)
    
    Amendment to articles of Incorporation dated June 17, 2004 incorporated
herein incorporated herein by reference to Exhibit 3.1(b) to the
Registrants Annual Report on Form 10-K for the fiscal year ended February
28, 2007.Exhibit 3.2(a)
    
    Bylaws of the Registrant as amended through October 15, 1997 incorporated
herein by reference to Exhibit 3(ii) to the Registrants Quarterly Report on
Form 10-Q for the quarter ended November 30, 1997.Exhibit 3.2(b)
    
    First amendment to Bylaws of the Registrant dated December 20, 2007
incorporated herein by reference to Exhibit 3.1 to the Registrants Current
Report on Form 8-K filed on December 20, 2007.Exhibit 10.1
    
    Second Amended and Restated Credit Agreement between Ennis, Inc., each of
the other co-borrowers who are parties, Bank of America, N.A. as
Administrative Agent, Swing Line Lender and L/C Issuer, Compass Bank, as
Syndication Agent, Wells Fargo Bank, N.A., as Documentation Agent, the other
lenders who are parties and Banc of America Securities, LLC, as Sole Lead
Arranger and Sole Book Manager, dated as of August 18, 2009 herein
incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed
on August 20, 2009.Exhibit 21
    
    Subsidiaries of Registrant*Exhibit 23
    
    Consent of Independent Registered Public Accounting Firm*Exhibit 31.1
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Executive Officer)*Exhibit 31.2
    
    Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Chief Financial Officer)*Exhibit 32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002*Exhibit 32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002*
 
 *
    
    Filed herewith E-1